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The New Zealand dollar fell rather significantly during the session on Wednesday, after shooting straight up in the air early in the day. By falling all the way down to the 0.69 level, we found an area that had previously been supportive, and of course are testing an interesting level. A breakdown below the 0.69 level should send this market looking towards the 0.6850 handle. That area should be rather supportive as well, but I do think that the longer-term downtrend is probably going to continue as the New Zealand dollar suffers at the hands of less than excited commodity markets. This is especially true in the precious metals and petroleum markets, which look very soft currently. I believe that rallies could end up being selling opportunities after we have seen this massive reversal.
Continued weakness?
The New Zealand dollar has been beaten down lately, and it looks very likely that the commodity markets will continue to struggle. The New Zealand dollar course is highly sensitive to the overall attitude of commodity traders, which isn’t very good right now. As we break down below the 0.69 level should send this market down to the 0.6850 level. I don’t really have a scenario in which I want to buy this market, least not until we break above the 0.70 level currently. I may change my mind, but right now there isn’t much in the way of a reason to get overly excited about the kiwi dollar. The US dollar seems to continue to strengthen in general, and that of course will be the case here as well. Ultimately, the markets could find themselves breaking much lower over the longer term. The New Zealand dollar struggles when there is uncertainty in the markets quite often.

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